HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<p><strong>1. Industry viewpoints:</strong></p><ul>
<li>The National Healthcare Security Administration recently released a document about the intensive procurement of high-value orthopedic consumables, so finally it is approaching.</li>
<li>The market of orthopedic implant consumables is still dominated by imported enterprises, and domestic enterprises have a certain gap in market competitiveness compared with foreign giants.</li>
<li>As the market size of China's oncology treatment industry grows, the proportion of targeted drugs and immunotherapy drugs are expected to increase in the future, and private oncology hospitals could get more development opportunities.</li>
</ul><p style="text-align: start;"><strong>2. Company news:</strong> </p><p style="text-align: start;">News about the new equity agreement, strategic cooperation and progress of new drug from <a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a>, <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a> and <a href="https://www.smartkarma.com/entities/jhbp-cy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:29201:1" rel="noopener">JHBP (Genor) (6998 HK)</a>.</p><p style="text-align: start;"><strong>3. </strong><strong>Market review:</strong></p><p style="text-align: start;">Last week, stock price for healthcare sector in A share decreased 0.83%, while CSI 300 decreased 2.71% over the same period of time.</p><p><strong>4. Risk disclosure:</strong></p><p style="text-align: start;">Policy risk, R&amp;D risk, Company risk and COVID-19 risk.</p>

1. Industry viewpoints:
The National Healthcare Security Administration recently released a document about the intensive procurement of high-value orthopedic consumables, so finally it is approaching.
The market of orthopedic implant consumables is still dominated by imported enterprises, and domestic enterprises have a certain gap in market competitiveness compared with foreign giants.
As the market size of China's oncology treatment industry grows, the proportion of targeted drugs and immunotherapy drugs are expected to increase in the future, and private oncology hospitals could get more development opportunities.
2. Company news: News about the new equity agreement, strategic cooperation and progress of new drug from Wuxi Biologics (2269 HK), BeiGene Ltd (6160 HK) and JHBP (Genor) (6998 HK).3. Market review:Last week, stock price for healthcare sector in A share decreased 0.83%, while CSI 300 decreased 2.71% over the same period of time.4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

JD Health International  / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health will commence trading on Tuesday, 8 December. JD Health priced its IPO at HK$70.58 and <a href="http://www.aastocks.com/en/stocks/news/aafn-con/NOW.1061472/ipo-news" target="_blank" rel="noopener">opened 19% higher</a> at HK$84.00 in the grey market and last stood at $89.05, up 26%.</p></div><div>
<p>In <a href="https://www.smartkarma.com/insights/jd-health-ipo-initiation-e-ppointments" target="_blank" data-smartkarma-citation="insights:45106" rel="noopener">JD Health IPO Initiation: E-Ppointments</a>, we opined that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. In <a href="https://www.smartkarma.com/insights/jd-health-ipo-phip-new-data-points-and-peer-comparison" target="_blank" data-smartkarma-citation="insights:45377" rel="noopener">JD Health IPO: PHIP New Data Points and Peer Comparison</a>, we stated that the new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. In <a href="https://www.smartkarma.com/insights/jd-health-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:45703" rel="noopener">JD Health IPO: Valuation Insights</a>, we noted that IPO price range is attractive.</p>
<div class="content-highlight"><p>Our base-case DCF derived price target of HK$78.79 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that the IPO price continues to provide good upside potential. </p></div>
</div>

JD Health (6618 HK) is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health will commence trading on Tuesday, 8 December. JD Health priced its IPO at HK$70.58 and opened 19% higher at HK$84.00 in the grey market and last stood at $89.05, up 26%.
In JD Health IPO Initiation: E-Ppointments, we opined that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. In JD Health IPO: PHIP New Data Points and Peer Comparison, we stated that the new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. In JD Health IPO: Valuation Insights, we noted that IPO price range is attractive.
Our base-case DCF derived price target of HK$78.79 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that the IPO price continues to provide good upside potential. 


Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

<p>Healthcare’s presence in Asian capital markets has increased substantially over the last four years on the heels of substantial investments in private markets (VC/PE). Policy reforms and changes in listing rules, most notably in China, have led to an explosion of market cap creation for the sector as the universe of companies has expanded to include innovative companies, most notably pre-revenue biopharmaceutical companies. At the same time, substantial investments in digital healthcare, fueled by the COVID-19 pandemic, adds a new source of listed companies. This Insight focuses on leading unlisted healthcare companies in China, India, and ASEAN that have raised substantial amounts of capital and appear to be candidates for listing.   </p>

Healthcare’s presence in Asian capital markets has increased substantially over the last four years on the heels of substantial investments in private markets (VC/PE). Policy reforms and changes in listing rules, most notably in China, have led to an explosion of market cap creation for the sector as the universe of companies has expanded to include innovative companies, most notably pre-revenue biopharmaceutical companies. At the same time, substantial investments in digital healthcare, fueled by the COVID-19 pandemic, adds a new source of listed companies. This Insight focuses on leading unlisted healthcare companies in China, India, and ASEAN that have raised substantial amounts of capital and appear to be candidates for listing.   

<div>
<p><a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan.</p>
<div><p>At the proposed IPO price range of HK$62.80-70.58 per share, JD Health will have a market cap of $25.3-28.5 billion. At the mid-point of the IPO price range, the total proceeds are HK$25,469 million ($3.3 billion). Six cornerstone investors will subscribe for $1.35 billion worth of the offer shares. The cornerstone investors include GIC, Hillhouse Capital and BlackRock. </p></div>
</div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/jd-health-ipo-initiation-e-ppointments" target="_blank" data-smartkarma-citation="insights:45106" rel="noopener">JD Health IPO Initiation: E-Ppointments</a>, we opined that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. In <a href="https://www.smartkarma.com/insights/jd-health-ipo-phip-new-data-points-and-peer-comparison" target="_blank" data-smartkarma-citation="insights:45377" rel="noopener">JD Health IPO: PHIP New Data Points and Peer Comparison</a>, we stated that the new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. Overall, we would participate in the IPO due to an attractive IPO price range.</p></div></div></div>


JD Health (6618 HK) is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan.
At the proposed IPO price range of HK$62.80-70.58 per share, JD Health will have a market cap of $25.3-28.5 billion. At the mid-point of the IPO price range, the total proceeds are HK$25,469 million ($3.3 billion). Six cornerstone investors will subscribe for $1.35 billion worth of the offer shares. The cornerstone investors include GIC, Hillhouse Capital and BlackRock. 
In JD Health IPO Initiation: E-Ppointments, we opined that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. In JD Health IPO: PHIP New Data Points and Peer Comparison, we stated that the new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. Overall, we would participate in the IPO due to an attractive IPO price range.

<p><a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (JDH HK)</a> is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health is seeking to raise $4 billion at a $29 billion valuation, according to IFR. The rumoured valuation is a significant increase to the August 2020 Series B round - a raise of $914 million at a $19.2 billion valuation. </p><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/jd-health-ipo-initiation-e-ppointments" target="_blank" data-smartkarma-citation="insights:45106" rel="noopener">JD Health IPO Initiation: E-Ppointments</a>, we opined that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. In <a href="https://www.smartkarma.com/insights/jd-health-ipo-phip-new-data-points-and-peer-comparison" target="_blank" data-smartkarma-citation="insights:45377" rel="noopener">JD Health IPO: PHIP New Data Points and Peer Comparison</a>, we stated that the new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. In this note, we take a first look at JD Health's valuation. Overall, based on valuation analysis, we think that the rumoured IPO valuation can be justified.</p></div>

JD Health (JDH HK) is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health is seeking to raise $4 billion at a $29 billion valuation, according to IFR. The rumoured valuation is a significant increase to the August 2020 Series B round - a raise of $914 million at a $19.2 billion valuation. In JD Health IPO Initiation: E-Ppointments, we opined that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. In JD Health IPO: PHIP New Data Points and Peer Comparison, we stated that the new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. In this note, we take a first look at JD Health's valuation. Overall, based on valuation analysis, we think that the rumoured IPO valuation can be justified.

China

111, Inc. operates as a digital and mobile healthcare platform. The Company offers pharmacy distribution, medical consultancy, e-prescription, and other services. 111 serves patients in China.

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111 Inc (YI US)

China Healthcare Weekly (Mar.19)

The article analyzed intensive procurement of high-value orthopedic consumables & its market pattern, trend of China's oncology treatment...

Xinyao (Criss) Wang

JD Health IPO: Trading Debut

JD Health priced its IPO at HK$70.58 and opened 19% higher at HK$84.00 in the grey market. Our DCF sensitivity analysis shows that the IPO price...

Arun George

Asian Healthcare - Coming of Age

This Smartkarma Originals Insight highlights 20 leading unlisted healthcare companies in Asia, mainly in digital healthcare and biopharma, that are...

Kemp Dolliver, CFA

JD Health IPO: Valuation Insights

At the proposed IPO price range of HK$62.80-70.58 per share, JD Health will have a market cap of $25.3-28.5 billion. Overall, we would participate...

Arun George

JD Health IPO: Valuation First Look

JD Health is seeking to raise $4 billion at a $29 billion valuation, according to IFR. Overall, based on valuation analysis, we think that the...

Arun George

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